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California Laws | Commercial Code
DIVISION 2. SALES
CHAPTER 6. BREACH, REPUDIATION AND EXCUSE (2601-2616)

(b) If the loss is partial or the goods have so deteriorated as no longer to conform to the contract the buyer may nevertheless demand inspection and at his option either treat the contract as avoided or accept the goods with due allowance from the contract price for the deterioration or the deficiency in quantity but without further right against the seller. (508)

2614. (1) Where without fault of either party the agreed berthing, loading, or unloading facilities fail or an agreed type of carrier becomes unavailable or the agreed manner of delivery otherwise becomes commercially impracticable but a commercially reasonable substitute is available, such substitute performance must be tendered and accepted. (509)

(2) If the agreed means or manner of payment fails because of domestic or foreign governmental regulation, the seller may withhold or stop delivery unless the buyer provides a means or manner of payment which is commercially a substantial equivalent. If delivery has already been taken, payment by the means or in the manner provided by the regulation discharges the buyer's obligation unless the regulation is discriminatory, oppressive or predatory. (510)

2615. Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance: (511)

(a) Delay in delivery or nondelivery in whole or in part by a seller who complies with paragraphs (b) and (c) is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the nonoccurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid. (512)

(b) Where the causes mentioned in paragraph (a) affect only a part of the seller's capacity to perform, he must allocate production and deliveries among his customers but may at his option include regular customers not then under contract as well as his own requirements for further manufacture. He may so allocate in any manner which is fair and reasonable. (513)

(c) The seller must notify the buyer seasonably that there will be delay or nondelivery and, when allocation is required under paragraph (b), of the estimated quota thus made available for the buyer. (514)

2616. (1) Where the buyer receives notification of a material or indefinite delay or an allocation justified under the preceding section he may by written notification to the seller as to any delivery concerned, and where the prospective deficiency substantially impairs the value of the whole contract under the provisions of this division relating to breach of installment contracts (Section 2612), then also as to the whole, (515)

(a) Terminate and thereby discharge any unexecuted portion of the contract; or (516)

(b) Modify the contract by agreeing to take his available quota in substitution. (517)

(2) If after receipt of such notification from the seller the buyer fails so to modify the contract within a reasonable time not exceeding 30 days the contract lapses with respect to any deliveries affected. (518)

(3) The provisions of this section may not be negated by agreement except insofar as the seller has assumed a greater obligation under the preceding section. (519)

CHAPTER 7. REMEDIES (2701-2725) (520)(Text)

2701. Remedies for breach of any obligation or promise collateral or ancillary to a contract for sale are not impaired by the provisions of this division. (521)

2702. (1) Where the seller discovers the buyer to be insolvent he may refuse delivery except for cash including payment for all goods theretofore delivered under the contract, and stop delivery under this division (Section 2705). (522)

(2) Where the seller discovers that the buyer has received goods on credit while insolvent he may reclaim the goods upon demand made within 10 days after the receipt, but if misrepresentation of solvency has been made to the particular seller in writing within three months before delivery the 10-day limitation does not apply. Except as provided in this subdivision the seller may not base a right to reclaim goods on the buyer's fraudulent or innocent misrepresentation of solvency or of intent to pay. (523)

(3) The seller's right to reclaim under subdivision (2) is subject to the rights of a buyer in ordinary course or other good faith purchaser under this division (Section 2403). Successful reclamation of goods excludes all other remedies with respect to them. (524)

2703. Where the buyer wrongfully rejects or revokes acceptance of goods or fails to make a payment due on or before delivery or repudiates with respect to a part or the whole, then with respect to any goods directly affected and, if the breach is of the whole contract (Section 2612), then also with respect to the whole undelivered balance, the aggrieved seller may (525)

(a) Withhold delivery of such goods; (526)

(b) Stop delivery by any bailee as hereafter provided (Section 2705); (527)

(c) Proceed under the next section respecting goods still unidentified to the contract; (528)

(d) Resell and recover damages as hereafter provided (Section 2706); (529)

(e) Recover damages for nonacceptance (Section 2708) or in a proper case the price (Section 2709); (530)

(f) Cancel. (531)

2704. (1) An aggrieved seller under the preceding section may (532)

(a) Identify to the contract conforming goods not already identified if at the time he learned of the breach they are in his possession or control; (533)

(b) Treat as the subject of resale goods which have demonstrably been intended for the particular contract even though those goods are unfinished. (534)

(2) Where the goods are unfinished an aggrieved seller may in the exercise of reasonable commercial judgment for the purposes of avoiding loss and of effective realization either complete the manufacture and wholly identify the goods to the contract or cease manufacture and resell for scrap or salvage value or proceed in any other reasonable manner. (535)

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